Amorepacific, LG H&H streamline portfolios amid rise of indie K-beauty brands

Amorepacific's headquarters in Seoul's Yongsan District / Courtesy of Amorepacific

Major beauty firms Amorepacific and LG H&H are downsizing their nonbeauty sectors to sharpen their focus on cosmetics as smaller rivals gain ground in the global beauty market.

The two companies have led Korea's beauty industry since the 1980s. Their business overhaul underscores how K-beauty's global rise is no longer defined by a handful of conglomerates, but rather by a growing number of smaller companies with competitive brands.

Amorepacific, whose key brands include Sulwhasoo, Laneige, Cosrx, Hera and Aestura, is seeking a buyer for its health supplement manufacturing plant in Anseong, Gyeonggi Province. The company has appointed a lead manager to oversee the bidding process.

The plant was built in 1989 by Pacific Pharmaceutical, which changed its name to Aestura in 2015. It became part of Amorepacific in 2021 after the company acquired Aestura and converted the facility into a health supplement production hub. Since then, however, the plant has struggled with weak utilization, with its operating rate falling to just 46 percent last year. Production totaled 31 billion won ($21 million) in the first quarter, less than half of the plant's quarterly capacity. Annual output stood at 171 billion won last year, down 7 percent from a year earlier.

The company said the sale of the Anseong plant does not signal an exit from the health supplement business under its VITALBEAUTIE brand. Instead, production will be transferred to Amore Beauty Park, the company's flagship manufacturing complex in Osan, Gyeonggi Province.

“We are seeking to sell the Anseong plant to manage our assets more efficiently,” said Cho Yong-hwan, a public relations officer at Amorepacific.

“We are keeping the health supplement business. It is one of our core businesses. By selling the Anseong plant, we will achieve not only streamlining but more efficient management. It will lead to creating a synergy between our health supplement and beauty businesses.”

LG H&H's headquarters in Seoul's Gwanghwamun area / Courtesy of LG H&H

The company’s sale of the Anseong plant comes after it put up its offices in Busan, Daegu, Daejeon and Gwangju Metropolitan City for sale in November.

LG H&H, whose flagship brands include The Whoo, Su:m37, O Hui and CNP, is seeking to sell its beverage subsidiary, Haitai HTB, which makes fruit drinks, carbonated beverages and energy drinks.

LG H&H plans to launch a preliminary auction for potential buyers and deliver a letter of intent this month. The company wholly owned Haitai HTB in 2011.

According to Choi Jin-sung, a public relations official at LG H&H, Haitai HTB is Korea's third-largest beverage company after Coca-Cola Beverage and Lotte Chilsung Beverage. He said the company has a fully integrated business platform, with capabilities spanning manufacturing, logistics and sales.

“Haitai HTB is currently up for sale, attracting interest from potential buyers who are looking to enter or expand their presence in the beverage market,” Choi said.

“We are selling Haitai HTB to restructure our strategic portfolio rather than capital gains or investment recovery. Potential buyers, meanwhile, can expand their domestic operations and secure additional growth and profitability through exports, capitalizing on the global popularity of K-drinks. Haitai HTB’s sales last year posted 343 billion won ($233 million), accounting for 7 percent of LG H&H’s EBITDA (earnings before interest, taxes, depreciation and amortization).”

Industry observers speculate that LG H&H could use proceeds from the sale to acquire indie beauty brands or other smaller companies to strengthen its cosmetics business.

They say that despite the global K-beauty boom, Amorepacific and LG H&H have ceded market leadership to fast-growing players such as APR and Goodai Global, leaving them on the sidelines of the industry's rapid growth. Against that backdrop, the companies' asset restructuring is viewed as a strategic effort to regain their competitive edge.